This paper argues that attending to social and political factors in development‐induced displacement is critical even for projects that involve resettlement of small populations. Taking the resettlement of two villages by the Lihir Gold Mine in Papua New Guinea as a unique case study, I analyse why one village was relatively successfully resettled, while the other has been very complicated, leading to hostility and conflict. In these cases the initial focus of all concerned in reaching a resettlement agreement was on the adequacy of compensation and housing, which mimicked the focus in the literature during the 1990s on impoverishment and compensation. From the late 1990s there have been calls for greater attention to social and political aspects of displacement and resettlement. Early attention to these factors in the Lihir case, particularly the key concepts of emplacement and disemplacement, would have highlighted flaws in the resettlement agreement and would have made it easier to avert the conflict and resistance that arose.